financialreport 2012/13
financialreport
The year ended June 2013 saw Yoorallarecord revenue of $106.2m. This included a one off gain of $8.1m
as a result of the sale of the Glenroy school property. Revenue attributable to the operations of Yooralla is recorded at $98.1m, an increase of $2.1m on the prior year (2011/12). Yoorallareported a surplus of $6.6m for the 2012/13 financial year. This result incorporated the one off gain on the sale of the Glenroy property of
$8.1m. Without this one off gain, Yoorallarecorded an operating deficit of $2.5m.
The chart below shows that our revenues continue to grow. Yooralla’srevenues have delivered compound growth in excess of 5% during the past 5 years.
This is testament to Yooralla actively seeking growth opportunitiesthroughincreasedserviceprovision,active merger activity and recognition of value through asset sales. Such activity is important given the relatively low increases in Government income assistance during this same period.
Millions
Yooralla Revenue Sources
$120
$100
$80
$60
$40
$20
$0
JUNE 2009JUNE 2010
JUNE 2011JUNE 2012JUNE 2013
Revenue from GovernmentRevenue from Other sources
Sources of income from Government bodies continue to provide Yooralla with the majority of our income stream.The support that we receive from Department of Human Services, Department of Education and Early Childhood Development, the Commonwealth Department of Families, Housing, Community Services and Indigenous Affairs and the Department of Education, Employment and Workplace Relations is imperative to providing quality services to our clients. The government derived income has amounted to $79.4m for the 2012/13 financial year.
The chart below shows how revenue in our service areas has required careful management. Government funding increases have declined in real terms and Yooralla has made positive gains in operating areas such as Early Childhood Education which has offset revenue reductions in some other Services.
Millions
Revenue by Service Type
$50
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
ResidentialRespiteServices
CommunityIndependent LivingServices
ChildrenServices, FamilyOptionsCaseManagement
DayOptions, Personal Support
Recreation
Business Employment
& Services
Other
June 2013June 2012
Net Assets for Yooralla have increased by 13.3% to $55.8 million. This recognises the value of the Glenroy property sale and the sale and leaseback arrangement of the Yooralla vehicle fleet. Yooralla’s financial position provides opportunities to develop our current business with flexible technologies and to continue to source growth prospects both through mergers and organic development.
These prospects are aimed distinctly at enhancing our ability to maintain a position as a pre-eminent provider of high quality services.
Yooralla continues to rely on the generosity of the public in the form of annual donations, bequests and trusts. On behalf of the clients of Yooralla, we therefore wish to thank all our financial supporters. It is only with these additional revenues that Yooralla is able to ensure the continuation of its services to people with a disability across Victoria and maintain the financial strength of the organisation.
Claire Keating
Chairperson - Finance Audit & Infrastructure Committee 23 September 2013
directors’
report
Your Directors submit their report for the year ended 30 June 2013.
Directors
The names and the details of the members of the Board during the financial year and until the date of this report are set out elsewhere in this report.The Board members were in office for the entire period unless otherwise stated.
Corporate Information
Yooralla is a company limited by guarantee and the liability of members of Yooralla is limited to $50 each. The principal activity of Yooralla are to provide services for people with disabilities in the State of Victoria.Yooralla’s range of essential services includes therapy, accommodation, respite, equipment, employment, recreation and support in and out of the home.
Objectives
Yooralla’s objectives are guided by our mission, which is to actively support people with disabilities, their families and carers, in all their diversity, to live the life they choose. Our Strategic Plan from 2010- 2013 has been extended by the Board for a further 12 months. This will enable the Board to critically examine and provide for changes in the disability landscape with the introduction of the National Disability Insurance Scheme. This scheme will change the methodologies within which we operate and theBoardisworkingtopositionYoorallatoachievethegreatestbenefitforallourclients.OurStrategic Plan’s five key priorities for the next 12 months continue to be:
1.Empowerment
2.Quality and Growth
3.Leadership
4.Collaboration
5.Capability
During the year ended 30 June 2013, our major focus has been on improving quality and implementing associated quality processes designed to improve our clients experience. We continued to support the National Disability Insurance Scheme and explored opportunities for growth through amalgamations with other service providers. We continued to work with our staff in providing training and education designed to empower our staff and improve service delivery.
Progress against our strategic plan is governed through the preparation and monitoring of annual business plans and tracking a number of key performance indicators. These performance indicators broadly monitor service delivery quality, client satisfaction, financial performance, and client and staff safety.
Review of Operations and Results
The surplus for the year ended 30 June 2013 was $5,630,511 (2012: surplus of $2,725,090). Included in the surplus for the year were other income from capital grants, bequests and a $8.1 million gain on sale of the Glenroy property.
The gain on the sale of the Glenroy property was an anomalous transaction. Typical operational activity for the year ended June 2013 resulted in Yooralla posting a deficit of $2.5 million.
Total revenues increased by $5.7 million. This increase is reflective of a $2.3 million increase in revenue from operating activities, a $8.1 million gain on sale of the Glenroy property, less the $4.5million
once-off gain from the CAL acquisition recorded in 2011/12.
The increase in revenue from operating activities is attributable to rate adjustments increasing recurring government grants by $3.3m, and one-off bequest income of $0.6m. These increases were partially
offset by a drop in fee income of $1.0m, decrease in capital grants of $0.3m and a further $0.3m decrease in sale of goods.
Total operating expenses increased by $2.8 million. The expenditure is increasing at the same pace with the increase in operating revenue.
We are currently working on a range of financial initiatives to deliver increases in revenue and decreases in costs which are designed to bring our results to break-even or better for the 2014/15 financial year.
Principal Activities
The company’s principal activities for the year were:
•Residential and carer support for people with disabilities
•Community and Independence services
•Children’s school and early intervention services
•Recreation services
•Adult day program services
•Supported employment services
•Raising of funds for these activities through government grants, fee for service and fundraising.
Significant Events or changes in affairs after balance date
The directors are not aware of any other matter or circumstance apart from the amalgamation with EDAR, disclosed under note 23, which will significantly or may significantly affect Yooralla’s operations, the result of those operations or Yooralla’s state of affairs.
Directors Benefits
No non-executive director of Yooralla has received or became entitled to receive a benefit by reason of a contract made by Yooralla with a director, with a firm of which a director is a member, or with a company in which a director has a substantial financial interest.
Environmental Regulations
The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of any State or Territory.
Indemnification and insurance of officers and auditors
During the financial year, insurance cover was provided in respect of directors’ and officers’ liability under the State Government’s insurance policy for State Government of Victoria funded Community Service Organisations. A premium was not incurred by Yooralla to give effect to this cover.
Yooralla has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of Yooralla or of any related body corporate against a liability incurred as such an officer or auditor.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of Yooralla or intervene in any proceedings to which Yooralla is a party for the purpose of taking responsibility on behalf of
Yooralla for all or any part of those proceedings.Yooralla was not a party to any such proceedings during the year.
Directors’ Meetings
During the year, the number of Board and Committee Meetings held and attended by Directors were as follows:
CommitteeMeetingsDirectors / Board Meetings / FinanceAuditInfrastructure / People Quality / Investment / NominationsRemuneration
Numberofmeetingsheld / 12 / 8 / 7 / 6 / 1
Numberofmeetingsattended:
DrPeterLangkamp / 12 / 7 / 5
MrBruceBonyhadyAM(1) / 10/10* / 7/7* / 5 / 1
Prof.DinahReddihoughAO(2) / 10 / 6/6*
MrSanjibRoy / 11 / 7 / 6 / 5
MrIanSilk / 11 / 5 / 2
MrPhillipSlater / 11 / 6
MsFionaSmith / 12 / 5 / 1/1*
MrWilliamHill(3) / 4/5*
MrJohnYeoman(4) / 5/5* / 3/4* / 1
MsClaireKeating(5) / 5/5* / 3/3*
MrRobertWalker(6) / 7/8*
MsBarbaraAlexanderAO(7) / 3/3* / 1/1*
MrWayneRamseyAM(8) / 3/3* / 1/1*
(1)Resigned on 14 May 2013
(2)Resigned on 4 Jun 2013
(3)Resigned on 30 Nov 2012
(4)Resigned on 1 Dec 2012
(5)Appointed on 5 Mar 2013
(6)Appointed on 6 Nov 2012
(7)Appointed on 12 Apr 2013
(8)Appointed on 29 May 2013
* Number of meetings the director was a member of the committee
Auditors’ Independence and Non-Audit Services
The directors received a declaration from the auditor of Yooralla which is included with the Independent Audit Report on pages 39 to 41.
The entity’s auditor, Deloitte, did provide non-audit services during the financial year (refer to Note 3).
On behalf of the Board
Signed in accordance with a resolution of the Directors.
Peter Langkamp
Chairperson
23 September 2013
corporate governance
The Board of Directors of Yooralla is responsible for corporate governance of the organisation. The Board guides and monitors the business and affairs of Yooralla to ensure that it achieves its Objects, as set out in the Constitution, and acts on behalf of its members by whom it is elected and to whom it is accountable.
The Board sets the policies, strategic direction and annual budget of Yooralla.It decides what services and programs are to be provided and supported.The Chief Executive, appointed by and accountable to the Board, is responsible for the day to day operations and administration of Yooralla.
The Board aims to ensure it discharges its responsibilities in an appropriate manner and it has established Charters and Policies to guide its actions.
The Board ensures that the members are informed and the information is communicated through: The annual report which is distributed to all members;
The annual general meeting and such other meetings as may be called to obtain approval for Board action as required by the Constitution.
Composition of the Board
The composition of the Board is determined in accordance with Yooralla’s Constitution:
The Board must comprise between seven and ten directors.The members can vote at a general meeting to change the limits on the number of directors. However the limits cannot be lower than five nor greater than fifteen. The Board can still act even if it has fewer directors than its lower limit. However, if it has fewer than five directors it cannot do anything other than appoint more directors so that there are five in all.
A person can become a director by being elected by the members at an Annual General Meeting. At each Annual General Meeting, at least one third of the Board (those on the Board for the longest time since last elected) must resign and having done so, are eligible to be re-elected.These rotation requirements do not include the Chief Executive Officer.
At the first Board meeting after each Annual General Meeting, the Board must elect a Chairman and a Deputy Chairman.
The Board can appoint a member to fill a casual vacancy on the Board.He or she will hold office until the next Annual General Meeting and will be eligible for re-election at that meeting.
At any meeting of Yooralla, the members present in person or by proxy, who are entitled to vote, may, by a majority vote, remove a director and appoint a replacement.
The Board meets in accordance with the Constitution and its directions and follows meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.
Details of the members of the Board of Yooralla during the financial year are set out elsewhere in this Annual Report.
Codes of Conduct
Codes of Conduct have been developed to establish the professional standards of behaviourrequired of directors, management and staff in the conduct of Yooralla’s affairs.In particular, the Staff Code seeks to provide guidance to staff to assist them to act with confidence and integrity in their interpersonal relationships with consumers, consumers’ family members, carers and advocates.The Codes are periodically reviewed and updated as required.
Risk Management Framework
The Board ensures that a risk assessment process is regularly undertaken and that control and monitoring processes are both in place and reviewed on a regular basis.The Board is supported in this responsibility through its sub-committees and by the development and formalisation and policies and procedures at the organisational and divisional levels.
Board Committees
The Board has established the following Committees to assist it in carrying out its responsibilities: Finance, Audit & Infrastructure Committee - This Committee’s primary purpose is to act in an
advisory capacity to the Board in relation to the company’s financial and infrastructure policies and procedures and the framework of financial internal controls.It provides the Board with assurance regarding the reliability of financial information for inclusion in the financial statements.It also provides oversight of procedures and policies to ensure Yooralla’s compliance with reporting requirements of Victorian and Commonwealth legislation and any Victorian or Commonwealth government body, department or instrumentality under which Yooralla is or becomes registered or funded.
The members of the Committee during the year were Ms Claire Keating (Chairperson - appointed 5 Mar 2013), Mr John Yeoman (Chairperson - resigned 1 Dec 2012), Mr Bruce Bonyhady (resigned 14 May 2013), Dr Peter Langkamp, Mr Ian Silk, and Mr Sanjib Roy.
People, Quality & Policy Committee – The purpose of the Committee is to have oversight of Yooralla’s compliance and risk management with respect to quality in the areas of Occupational Health and Safety, client safety, care and privacy.It monitors client and staff satisfaction, quality of service delivery and policies and procedures.The Committee’s function is predominately one of governance to satisfy itself that Yooralla has appropriate quality frameworks, procedures and policies in place and that those processes are monitored and audited and appropriate remedial action taken when and where necessary.Yooralla’s quality standards are audited by SAI Global who report to Yooralla’s senior management and to the People, Quality & Policy Committee.
The members of the committee during the year were Prof Dinah Reddihough (Chairperson resigned on 4 Jun 2013), Dr Peter Langkamp, Ms Fiona Smith, Ms Barbara Alexander (appointed 12 Apr 2013), MrWayne Ramsey (appointed 29 May 2013) and Mr Sanjib Roy.
Investment Committee - This Committee provides advice and recommendations to the Board relating to Yooralla’s Long Term Investment Portfolio (LTIP). The Committee regularly reviews the investment policies and strategy of Yooralla and monitors the performance of Yooralla’s investment managers. The Committee has co-opted two additional members, with considerable experience in investment matters, to assist in its deliberations.
The members of the investment committee during the year were Mr Phillip Slater (Chairperson), Mr Bruce Bonyhady (resigned 14 May 2013), Ms Fiona Smith (resigned 22 Aug 2012), Mr Ian Silk, Mr Richard Greenfield (co-opted member), Dr Steven Vaughan (co-opted member) andMr Sanjib Roy.
NominationsandRemuneration–ThiscommitteeisresponsibleonbehalfoftheBoardtodischarge itsresponsibilitiesofoversightandcorporategovernance.Thecommitteehasfourbroadareas
ofresponsibility:a)NominationofDirectors(includingensuringthecompositionoftheBoardis appropriate,successionplanningandcomposition);b)BoardPerformanceReview;c)Chief ExecutiveOfficerAppointmentandPerformanceReview;andd)Oversightofexecutive(directreports totheCEO)remunerationarrangements.
ThemembersoftheNominationsandRemunerationcommitteeduringtheyearwereMrBruce Bonyhady(Chairperson-resigned14May2013)andMrJohnYeoman(resigned1Dec2012).Asa resultoftheseresignationsduringtheyear,themembershipofthiscommitteeisnowunderreview.
Board’s Compensation
A non-executive director may not be paid by Yooralla for his or her work as a director or for services to people with disabilities. He or she is only paid for his or her out of pocket expenses.Subject to section 241 of the Corporations Act, Yooralla must indemnify every director or other officer of Yooralla against all liabilities which he or she may take upon himself or herself as agent for Yooralla or for the benefit or
intended benefit of Yooralla. However, Yooralla will not be required to provide an indemnity if the director or officer was acting outside the scope of his or her authority pursuant to the Corporations Act.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013NOTES / 2013 / 2012
$ / $
Revenue from operating activities / 2 / 91,739,678 / 89,360,708
Investment income / 2 / 2,466,732 / 2,583,772
Fundraising income / 2 / 3,767,257 / 3,844,028
Profit on disposal of property, plant and equipment / 2 / 8,226,295 / 166,648
Gain on acquisition of business / 2 / - / 4,527,438
Total operating revenue / 106,199,962 / 100,482,593
Employee benefits and staff agency expense / 3 / 74,782,868 / 71,398,244
Discretionary expenditure for carers & clients / 6,041,183 / 6,607,388
Motor vehicle expense / 1,646,456 / 1,442,588
IT, telecommunications & postage expense / 1,660,811 / 1,372,248
Food supplies expense / 1,310,735 / 1,368,535
Printing, stationery & photocopying expense / 629,521 / 732,163
Rent, insurance & utilities expense / 2,196,363 / 1,523,775
Repairs, maintenance and minor equipment expense / 3,299,083 / 3,052,026
Raw materials and consumables used / 1,036,412 / 891,370
Fundraising expenses / 1,770,025 / 2,761,861
Depreciation and amortisation expenses / 3 / 2,177,422 / 2,903,317
Other expenses / 4,018,572 / 3,703,988
Total operating expenses / 100,569,451 / 97,757,503
Surplus for the year / 5,630,511 / 2,725,090
Other Comprehensive Income
Items that will notbe reclassified subsequentlyto profit orloss:
Unrealised (loss) / gains on equity investments / 1,035,689 / (788,923)
Realised (loss) / gains on equity investments / (104,640) / -
Total Comprehensive Income for the year / 6,561,560 / 1,936,167
ANALYSIS OF COMPREHENSIVE INCOME
Deficit from operations / (2,474,309) / (1,802,348)
Profit on disposal of the Glenroy property / 8,104,820 / -
Gain on acquisition of business / - / 4,527,438
Other comprehensive income / 931,049 / (788,923)
Total Comprehensive Income for the year / 6,561,560 / 1,936,167
(The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes).